Kenyan finance minister seeks to raise debt ceiling

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Kenya's finance minister has asked parliament to let the East African economy raise its debt ceiling to 10 trillion shillings ($85.69 billion) from 9 trillion, two newspapers said on Wednesday.

The Business Daily and the Daily Nation said National Treasury Cabinet Secretary Ukur Yatani had asked parliament to change the public finance management law to allow more borrowing to fund the budget in the year through June 2023.The 2022/23 budget of 3.3 trillion shillings has a deficit of 6.2% of GDP.

In December, Yatani had said the government aimed to replace its nominal public debt ceiling with a debt anchor as a proportion of GDP by the end of June. This year the finance ministry said it wanted to peg the debt ceiling at 55% of GDP, with the requirement of a reasonable explanation to lawmakers if debt needed to go higher.President Uhuru Kenyatta stepped up borrowing when he took office in 2013, driving up debt to the current level of more than 60% of GDP, versus just over 40% when he took over.

Political critics accuse Kenyatta's government of saddling the country with steep repayment obligations, criticism it has rejected by saying the borrowed funds have funded infrastructure projects such as railways key to ensure economic expansion.

 

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